Anecdotes vs. Data: Real Estate Edition

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It seems that many real estate agents, like many baseball club recruiters and managers, rely on gut instincts and personal experience instead of the data:

In higher price ranges, though, agents report an uptick in the number of days properties are staying on the market. "I'm looking at the listings for Bethesda now," Jane Fairweather, an agent with Coldwell Banker Residential Brokerage in Bethesda, said last week. "Here's what I see priced between $800,000 and $900,000: 279 days on market, 83 days, 16 days, 118 days, 56 days, 17 days, 2 days, 55 days, 30, 45, 27, 67, 120."
Always remember that we have to pick and choose our anecdotes carefully; they're non-random, judgmental surveys, easily biased by not being representative of the whole. Anecdotes can provide valuable insight into areas for which no reliable data are available. But wait, that set of anecdotes above--covering a narrowly priced range of homes in a single area--didn't compare anything over time! And hard, reliable data are available on the average length of time homes have been on the market.

So what happens when the reporter looks it up?

Although many agents report anecdotally that homes are remaining on the market longer, statistics from the area's multiple listing service show days on market for all properties relatively flat for most local jurisdictions in September.
Now, I'm not one to ignore people whose livelihoods depend on being right about a specific market. And I understand the urge for the juicy soundbite for a reporter to nibble. But is it too much for the reporter to point out that real estate markets fluctuate all the time? That is, shouldn't we expect that--even in a sizzling market--a real estate agent would likely be able to find one neighborhood whose expensive houses are staying on the market longer than before?

3 Comments

Another point regarding MLS systems. Often people will "relist" their properties on MLS systems. It is likely that statistics collected from the MLS do not take this into account. Relisting will occur because the agent or seller feels a listing has become "stale", they will tweak the price or description to generate an "update" in the MLS or simply "relist" it. There is an average perceived "acceptable time" for the listing to remain in the MLS. Also, agents will not remove properties from the MLS because it generates calls from customers, especially if the MLS markets directly to consumers, such as via a website.

I've noticed multiple listings for the same property on the public versions of MLS, and didn't think to connect that to the accuracy of real estate data. Nice catch.

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This page contains a single entry by Kevin published on October 21, 2004 12:29 AM.

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